With HYSA (high-yield saving accounts), SSB (Singapore Saving Bonds), Fixed Deposits (FD) and T-Bills slashing their interest rates, parking our money in them is not as attractive anymore. This is especially so with interest rates expected to have further rate cuts in the next few months.

UOB has slashed its interest rates for the UOB One Account to 3.3%, and OCBC Bank has slashed its interest rates for its OCBC 360 Account to 6.3%, with multiple conditions.

While we do still park some of our money in these outlets, ultimately, it is time for us to find other investments that would fit our risk appetite (low risk), and time horizons (> 5 years). Coincidentally, while we were shopping around, we read the news of the biggest drop in Singapore STI since the global financial crisis.

Dividend Portfolio

We have been toying with the idea of buying stocks that allow us to have some “returns” regularly, and dividend stocks pop up in our minds. In Singapore, many of the dividend stocks are REITs (real estate investment trusts) or blue-chip stocks like bank stocks. These fit into our risk appetite as these companies are usually more well-known, stable, and have a lower (not risk-free) risk of collapsing.

Ultimately, after researching many stocks in Singapore’s SGX, we decided to invest in Singapore bank stocks – namely UOB Bank (SGX: U11), OCBC Bank (SGX: O39), and DBS Bank (SGX: D05). Just a little stock tidbit – In Singapore, you have to buy shares in a minimum quantity of 100 shares, and bank shares can be pretty costly.

This is why we choose bank stocks in our investment decision.

Safe(r) investment

We are looking for a low(er) risk investment instrument to put some money inside. As a single-income family with kids, risk is something we cannot afford, and being able to have a good night’s sleep instead of having sleepless nights during black swan days is not something we look forward to.

If we were looking for something with more excitement, we would have looked into trading US stocks or even options. However, as we are rather passive investors, having a slow steady investment portfolio works better for us. We are also looking to build a US stock portfolio, but that is for another day.

Bank stocks in Singapore are considered blue chip stocks – which means they are high-quality stocks and well-known companies, and it gives us confidence to invest in them.

Mentally, we are treating our investment in bank stocks as a semi-replacement for FDs and SSBs. While stocks carry much higher risks, we hope that Singapore bank stocks will be a little more resilient and will be able to hold their value even after 10 years and beyond.

Decent Dividend Yield

Having an investment portfolio focusing on dividends allows us to capitalize on the returns without the need to sell the shares. This is aligned with our goal of having “passive income” without too much effort. The dividend dates by the local banks are announced and updated on their website, and some banks give out dividends up to 4 times a year.

Our goal for the investment portfolio that we are building is to focus on low effort, stability, and returns. Based on the current price of the bank share, the yearly dividend can be up to 5.x% annually. However, we also foresee that the local banks may cut their dividend given the current market turmoil. We have considered this possibility, and accepted this risk should it happen.

College Fund For Kid

Many people say the Singapore stock market is a very boring market with little volume and variety in their listings. We feel that boring is what we need as we do not want to be monitoring the market everyday. We are also focusing on companies that have a strong presence in Singapore – mainly banking stocks, so these factors do not have any impact on our decisions.

We are buying with the intention of holding for long-term and we do not have any interest in trading these bank stocks. We are more focused on building a more resilient portfolio that can stomach extremely bad market conditions and getting good name stocks seem to be the way to go.

Our ultimate goal is for our investment portfolio to serve as a passive income for us for the next 10 years and beyond, and to be used as a college fund for our kid once the time comes. Many of us are probably POSB kids with our first bank account with the POSB Bank, and we observe bank stocks in Singapore tend to be rather stable stocks. Fingers crossed, these 3 local banks will be sustainable till the year 2040 and beyond.

Last Words

Disclaimer, we are only sharing what we have invested thus far. We are not financial advisors, so find one if you need one. We are investing with money that we can afford, so plan your finances wisely. Our time horizon is very long (>10 years), so we are not concerned with the price fluctuating in between.

We will be adding more shares to this investment portfolio whenever we feel the price is reasonable and hopefully with time, we will be able to get a decent dividend income.

What are you guys investing in?

Last Updated: 09 Apr 2025